Household and Individual Determinants on off-spring’s Educational Expenditure : Evidence from Arab countries
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Riham Rizk The British University in Egypt(BUE)
Hala Abou-AliFEPS, Cairo University
Household and Individual Determinants on off-spring’s Educational Expenditure : Evidence from Arab countries
ERF Workshop on education in The ERF Region
Overview
Motivation
Data and methodology
Empirical results
Stylized facts
Conclusion and recommendations
Motivation
Education is at the top of the reform agenda for many policymakers in the Arab countries especially in Egypt.
Education is considered an antidote for reducing poverty levels and promoting economic growth, both at the national and household levels.
Education is seen as a solution against authoritarian governments and a condition for achieving democracy.
Where is the problem, then ? (1/2)
The average level of education among MENA population is still very low compared to East Asia and Latin America. The average gross enrollment in the secondary school was: about 75% in MENA,
78% in East Asia and 90% in Latin America. The average gross enrollment in higher education reached about 26% in 2003 in
MENA which represent two-thirds of the other two regions average. Spending on education as a percentage of GDP reaches 5% compared to 3.6%
and 3.9% in East Asia and Latin America, respectively.
This could be attributed to the free education applied to secondary and higher education compiled. Altogether, lead to low level of Arab countries human capital.
*Reference :World Bank ( 2008)
Where is the problem, then ? (2/2)
There is a huge concern to public expenditure on education while continuing ignoring the household expenditure quantum proves to lead to incorrect long run government educational policies.
The relation between public and private spending could be either complementary or substitute.
Objectives
To what extent the amount of household income affects the demand on education in Arab countries?
What are the patterns of household education expenditures in Arab countries? And, to what extent it differs with household and individual characteristics ?
What are the various factors that determine household and individual expenditure on education in Arab countries? Do they differ from one country to another in the region? And why?
Data
ERF-OAMDI Harmonized Household Income and Expenditure Surveys 2010/2011 for
Egypt, Jordan, Palestine, Tunisia, and Sudan 2009.
Methodology (1/2)
To estimate individual and household determinants of education expenditure , we use Robust OLS model to reduce Heteroscedasity problem. Thus , logged annual household expenditure was regressed on various family characteristics such as Household income, Father’s education , Mother’s education, Father’s
occupation, Mother’s occupation, number of children at each different age categories and geographic residence.
The conceptual model follows Mincer’s schooling model :Mincer’s schooling model :
Log HHEX=Log HHEX=αα + +ββggww++γγXXii++ЄЄ
Methodology (2/2)
FirstFirst, Pooled sample model including all individualistic characteristics for the family is estimated.
SecondSecond, the full sample was divided into income quintiles and the same model was estimated separately for each subsample, in order to examine at each income level the effects of family characteristics on household’s expenditure pattern on education following Quang (2012).
ThirdThird , we grouped the sample by children’s age to study the link between the economic circumstances and patterns of educational allocation among the school-aged children following Hannum (2005) and Qian & Smyth (2010). The model was estimated separately for each subsample with pre- and primary school aged children, secondary-aged and college-aged children focusing on income effect and geographic location.
FinallyFinally, the Mincerian model is regressed again on the various household characteristics was namely, household income, head’s education, head’s occupation, household’s number of children and household's geographic location.
Results highlight(1/4)
The main findings that emerge from this study are three folds:
Household income has significant effects on the magnitude of educational expenditure
Education and occupation of household “head” “Mother’s and father’s” matter.
Households place of residence has a significant impact.
Results highlight(2/4)Individual Determinants..
A)Using log Total Household educational expenditure Log (HH Educational expenditure) Egypt Tunisia Jordon Palestine Sudan Father's education level
Primary 0.175*** 0.055 0.113 0.290*** -0.026
Secondary 0.302*** 0.171*** 0.283** 0.416*** 0.209***
Tertiary 0.397*** 0.214*** 0.704*** 0.751*** 0.599***
Mather's education level
Primary 0.278*** 0.162** 0.039 0.074 0.279***
Secondary 0.390*** 0.140*** 0.099 0.454*** 0.538***
Tertiary 0.485*** 0.201*** 0.512*** 0.403*** 0.623***
Household decomposition
No. Pre-primary school age children -0.194*** 0.015** -0.445*** -0.227*** -0.200***
No. of Secondary-age children 0.103** -0.125** -0.536** -0.157** 0.081**
No. of college -age children 0.715*** 0.669*** 0.488*** 0.234*** 0.529***
Household income
Income quintile 2 0.290*** 0.234*** 0.024 0.036 0.072
Income quintile 3 0.423*** 0.490*** 0.190* 0.229*** 0.275***
Income quintile 4 0.499*** 0.721*** 0.170* 0.294*** 0.365***
Income quintile 5 1.002*** 1.094*** 0.394*** 0.418*** 0.899***
Egypt Jordon Palestine Sudan
Father’s occupation
Cadres 0.327*** -0.712 0.439*** #
Middle professional 0.137** 0.377*** 0.218***
Lower professional -0.038 0.283*** 0.180***
Blue collar and service -0.014 -0.015 0.082
Unemployment 0.015 -0.649*** -0.032
Mother’s occupation
Cadres 0.028 -0.441 0.541**
Middle professional 0.029 0.219* 0.551***
Lower professional 0.035 -0.49 0.185***
Blue collar and service 0.128*** -0.653 -0.079
Unemployment -1.106 -0.054 -0.194
Household Place of residence Lower Egypt North West Bank Western
-0.371*** -0.397*** 0.105*** 0.155***Upper Egypt South Eastern
-1.215*** -0.598*** 0.123**Northern
0.032N 10276 3046 11394 6144
R-square 0.441 0.459 0.324 0.377
Results highlight(3/4)Table (2): Using Log Share of Educational Expenditure Log (Education share ) Egypt Jordon Palestine Sudan Father's education level
Primary 0.169*** 0.09 0.276*** 0.007Secondary 0.298*** 0.219** 0.430*** 0.220***
Tertiary 0.442*** 0.638*** 0.762*** 0.689***Mather's education level
Primary 0.301*** 0.094 0.039 0.201***Secondary 0.403*** 0.175 0.402*** 0.410***
Tertiary 0.590*** 0.572*** 0.360*** 0.538***
Household decomposition No. Preschool age children -0.198*** -0.443*** -0.228*** 0.017
No. of secondary age children 0.706*** 0.497*** 0.232*** 0.276***No. of college -age children -0.032** 0.504*** 0.515*** 0.425***
Household income Income quintile 2 -0.03 -0.388*** -0.722*** -0.800***Income quintile 3 -0.121*** -0.495*** -0.936*** -1.127***Income quintile 4 -0.286*** -0.869*** -1.235*** -1.504***Income quintile 5 -0.269*** -1.235*** -1.735*** -1.837***
Egypt Jordon Palestine Sudan Household Place of
residence Lower Egypt North West Bank Western
-0.346*** -0.367*** 0.105*** 0.288***Upper Egypt South Eastern
-1.162*** -0.543*** 0.014Northern
-0.003N 10276 3046 11394 6144
R-square 0.441 0.382 0.314 0.267
Results highlight(4/4)Household Determinants of Education Expenditure
Egypt Tunisia Jordon Palestine Sudan Dependent variable : Log educational Expenditure
Household IncomeSecond quintile 0.367*** 0.259*** 0.401*** 0.142 0.217***Third quintile 0.542*** 0.502*** 0.755*** 0.243** 0.341***
Fourth quintile 0.711*** 0.776*** 0.862*** 0.573*** 0.465***Fifth quintile 1.190*** 1.117*** 1.694*** 0.768*** 0.985***
Household's head education
Primary 0.230*** 0.042 0.560*** 0.297*** 0.237***Secondary 0.490*** 0.186*** 1.275*** 0.570*** 0.519***
College 0.812*** 0.303*** 1.521*** 0.800*** 0.986***Number of school -aged
children No. of pre-Prim school-
aged children 0.126*** 0.213*** -0.166*** -0.133*** 0.003No. of secondary school
aged children 0.438*** 0.304*** 0.09 0.055 0.316***No. of college-aged
children 0.090*** 0.223*** 0.305*** 0.527*** 0.378***N 4233 6406 1881 2659 2624
R-square 0.391 0.229 0.257 0.229 0.255
Stylized Facts (1/3)
Stylized Facts (2/3)
Stylized Facts (3/3)
Recommendations
Conditional cash transfers
Subsidies
Thank you
REHAM RIZK
ASSISTANT PROFESSOR BRITISH UNIVERSITY IN EGYPT
REHAM.RIZK@BUE.EDU.EG
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